Use the Table for the Question(s)below

question 29

Multiple Choice

Use the table for the question(s) below.
-Banco Industries expect sales to grow at a rapid rate over the next 3 years,but settle to an industry growth rate of 5% in year 4.The spreadsheet above shows a simplified pro forma for Banco Industries.Banco industries has a weighted average cost of capital of 12%,$50 million in cash,$60 million in debt,and 18 million shares outstanding.If Banco Industries can reduce their operating expenses so that EBIT becomes 12% of sales,by how much will their stock price increase?

• A)$2.81
• B)$3.36
• C)$4.98
• D)$8.89

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Definitions:

Animism

The belief or worldview that objects, places, and creatures all possess a distinct spiritual essence or consciousness.

Inner Speech

Vygotsky’s concept of the ultimate binding of language and thought. Inner speech originates in vocalizations that may regulate the child’s behavior and become internalized by age six or seven.

Cognitive Development

Refers to the progression of thinking, problem solving, and information processing abilities from childhood through adulthood.

Language Development

How kids learn to grasp and use language during the initial stages of their life.